Aviation industry reports one of safest ever years, as future risks linger on horizon

Last year was one of the safest ever for the global airline industry in terms of fatal accidents. But, despite the good news, insurer Allianz is warning that a number of risks lie ahead for the industry, including more costly business interruption incidents from grounding, cyber and drone events and greater turbulence from climate change.

Expensive repairs and engine claims, bird strike damage, ground collision incidents, slips and falls, fleet groundings, misfuelling incidents and liability awards, are just some of the areas in which insurers are seeing heightened loss activity.

This is according to AGCS’s report, Aviation Risk 2020: Safety And The State of The Nation, produced with the specialist Embry-Riddle Aeronautical University.

“Thankfully, fatal air accidents involving the modern generation of commercial aircraft are now infrequent and the past few years have been among the safest ones in aviation history,” says global head of aviation at AGCS, Tom Fadden. “However, the headline improvements in safety shouldn’t lull the aviation industry into a false sense of security. The sheer volume and magnitude of aviation losses is often underestimated – at any time Allianz alone will handle thousands of claims and be it grounding incidents or collisions with drones – there are also many new risks on the horizon which airlines, manufacturers and airports have to prepare for.”

The report, which analyses over 50,000 aviation insurance industry claims worth more than £12.7bn from 2013 to 2018, shows that collision/crash incidents currently account for over half the value of all claims (57%) equivalent to £7.2bn – and over a quarter of claims by number (27%). In future, more costly grounding incidents, business interruption incidents resulting from cyber and drone events, and more incidences of turbulence are just some of the trends expected to have an influence on the loss landscape, the report notes.

The report also highlights the ongoing decline in the number of fatal accidents over the past 60 years – a period of hugely increased passenger growth. Between 2008 and 2017, there were 2,199 fatalities from 37 commercial passenger jet fleet events globally – less than 8% of the total number since 1959. In 2017, for the first time in at least 60 years of aviation, there were no fatalities on a passenger jet flight. 2018 ranks as the third safest year ever with 2015 ranked second.

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